• Client: EC - DG FISMA
  • Implementation period: 2019 - 2020 (Completed)
  • Geographic coverage: European Union

How has the NFRD been implemented to date?

The Non-Financial Reporting Directive (Directive 2014/95/EU) was adopted in 2014. Companies under the scope of the Directive had to report for the first time according to its provisions in 2018, covering financial year 2017. The NFRD amended the Accounting Directive (Directive 2013/34/EU). It aims to improve the quality and quantity of non-financial information reported by companies, as a means of achieving three objectives.

In mid-2017, as required by the Directive, the Commission published Non-Binding Guidelines, to help companies implement the Directive, especially those who may be reporting non-financial information for the first time. In June 2019, the Commission published additional guidelines to help companies report climate-related information. The publication of the climate reporting guidelines was a deliverable of the Sustainable Finance Action Plan (2018). They are a supplement to the 2017 guidelines and do not modify the 2017 guidelines, which remain applicable. The new guidelines provide guidance to companies on how to report climate-related information in accordance with the previsions of the Non-Financial Reporting Directive and consistent with the recommendations of the Task Force on Climate-related Financial Disclosures.

The purpose of the study was to provide data and analysis for the Commission services as part of their ongoing monitoring of the implementation of the Non-Financial Reporting Directive. The study helped to fill certain data gaps that emerged in the course of preparing the Fitness Check on public corporate reporting, for example regarding the costs of compliance with the Directive. In addition, the data and analysis contained in the study will be used by the Commission services to prepare an impact assessment for any possible proposal to revise the Non-Financial Reporting Directive, if the Von der Leyen Commission were to decide to make such a proposal.

The project has been conducted by Trinomics in collaboration with CEPS (lead), Economisti Associati and Milieu Consulting. The project did run from October 2019 and finish by September 2020.

This investigation provided the following preliminary results:

  • improving company accountability;
  • Enhancing companies’ performance through better understanding of non-financial risks and opportunities and better integration of those risks and opportunities into business strategies and operations; and
  • Enhancing the efficiency of capital markets, by enabling investors to better integrate material non-financial information into their investment decisions.